Unemployed and overqualified? Graduates in the UK labour market

The UK has experienced a rapid expansion in its graduate population, coinciding with the transformation to a labour market which places a premium on higher level skills. Autumn 2014 saw an additional 30,000 university places opened up to students in England, meaning that – for the first time – new UK student numbers exceeded half a million. By next academic year, the cap on student numbers will be lifted entirely, placing no limit on the number of places universities are able to offer. This rapid expansion in student numbers forms part of an ongoing trend. The percentage of graduates in the UK’s population has increased steadily over the last twenty years and now boasts the third highest graduation rate in the OECD – a figure of 55 per cent of young people and behind only Iceland and Poland.

Yet the speed and scale of this transformation from a university degree as the preserve of a small, professional elite to a mass higher education system has inevitably raised some concerns. In the UK, these have been exacerbated by events in recent years. In 2012, tuition fees for English universities rose to up to £9,000 per year, meaning few graduates will leave university with a debt of less than £40,000. This significant increase to the cost of study occurred alongside a period of prolonged economic downturn, making the labour market transitions of students to graduate employment more challenging.